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Item 1. Financial Statements

2025-08-06 compared with 2025-05-05 · 176 added, 115 removed, 533 unchanged (35% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PER SHARE AND SHARE DATA) MARCH 31,

2025 DECEMBER 31,

(IN THOUSANDS, EXCEPT PER SHARE AND SHARE DATA) JUNE 30, 2025 DECEMBER 31,

Current assets:

28 unchanged sentences

Total liabilities 472,867 516,448

Commitments and contingencies

Commitments and contingencies (refer to note 10)

Stockholders' equity

Preferred shares, $ 0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Common shares, $ 0.01 par value, 600,000,000 shares authorized, 162,426,898 and 161,958,810 shares issued, 161,475,707 and 161,009,112 shares outstanding as of March 31, 2025 and December 31, 2024, respectively

Preferred shares, $ 0.01 par value, 50,000,000 shares authorized, no shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Common shares, $ 0.01 par value, 600,000,000 shares authorized, 163,856,290 and 161,958,810 shares issued, 160,614,890 and 161,009,112 shares outstanding as of June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 1,237,891 1,216,925

Accumulated deficit ( 125,506 ) ( 128,281 )

Accumulated other comprehensive loss ( 5,268 ) ( 13,424 )

Treasury stock at cost, 951,191 and 949,698 shares at March 31, 2025 and December 31, 2024, respectively

Accumulated other comprehensive income (loss) 4,949 ( 13,424 )

Treasury stock at cost, 3,241,400 and 949,698 shares at June 30, 2025 and December 31, 2024, respectively

( 48,394 ) ( 18,184 )

6 unchanged sentences

AND COMPREHENSIVE INCOME (LOSS)

THREE MONTHS ENDED MARCH 31,

THREE MONTHS ENDED

JUNE 30, SIX MONTHS ENDED

(IN THOUSANDS, EXCEPT PER SHARE AND SHARE DATA) 2025 2024 2025 2024

5 unchanged sentences

General and administrative 17,186 28,071 36,840 51,050

Intangible asset amortization 13,094 12,593

Depreciation and amortization expense 873 432

Depreciation and amortization 14,155 13,194 28,122 26,219

Total operating expenses 54,302 62,545 111,162 121,231

5 unchanged sentences

Income (loss) before income taxes 6,251 ( 12,269 ) 10,793 ( 17,703 )

Benefit for income taxes ( 201 ) ( 751 )

Net income (loss) 4,743 ( 4,683 )

Provision (benefit) for income taxes 8,219 305 8,018 ( 446 )

Net income (loss) per share attributable to common stockholders:

( 1,968 ) ( 12,574 ) 2,775 ( 17,257 )

Other comprehensive income (loss):

Foreign currency translation adjustment, net of tax of $( 875 ), $( 15 ), $( 986 ), and $ 45 , respectively

12,633 ( 701 ) 21,375 ( 708 )

Change in fair value from interest rate swap, net of tax of $( 816 ), $( 180 ), $( 1,024 ), and $ 6 , respectively

Total other comprehensive income 8,156 557

( 2,416 ) ( 591 ) ( 3,002 ) ( 27 )

Total other comprehensive income (loss) 10,217 ( 1,292 ) 18,373 ( 735 )

Comprehensive income (loss) $ 8,249 $ ( 13,866 ) $ 21,148 $ ( 17,992 )

14 unchanged sentences

COMPREHENSIVE

LOSS TREASURY STOCK TOTAL

INCOME TREASURY STOCK TOTAL

STOCKHOLDERS'

SHARES AMOUNT SHARES AMOUNT

Balance as of March 31, 2025 162,426,898 1,625 1,229,660 ( 123,538 ) ( 5,268 ) ( 951,191 ) $ ( 18,200 ) $ 1,084,279

Equity-based compensation expense, net of forfeiture — — 8,245 — — — — 8,245

Common stock withheld for tax liabilities — — — — — ( 496,930 ) ( 4,944 ) ( 4,944 )

Common shares issued for employee share-based compensation 1,429,392 14 ( 14 ) — — — — —

Restricted stock forfeiture — — — — — — — —

Common shares issued for contingent consideration — — — — — — — —

Common shares repurchased — — — — — ( 1,793,279 ) ( 25,250 ) ( 25,250 )

Change in fair value from interest rate swap, net of tax — — — — ( 2,416 ) — — ( 2,416 )

Net loss — — — ( 1,968 ) — — — ( 1,968 )

Foreign currency translation adjustment, net of tax — — — — 12,633 — — 12,633

Balance as of June 30, 2025 163,856,290 $ 1,639 $ 1,237,891 $ ( 125,506 ) $ 4,949 ( 3,241,400 ) $ ( 48,394 ) $ 1,070,579

Balance as of December 31, 2024 161,958,810 1,620 1,216,925 ( 128,281 ) ( 13,424 ) ( 949,698 ) $ ( 18,184 ) $ 1,058,656

2 unchanged sentences

Common shares issued for employee share-based compensation 1,442,136 14 ( 14 ) — — — — —

Restricted stock forfeiture — — — — — — —

Common shares issued for contingent consideration 455,344 5 5,665 — — — — 5,670

Common shares repurchased — — — — — ( 1,793,279 ) ( 25,250 ) ( 25,250 )

Change in fair value from interest rate swap, net of tax — — — — ( 3,002 ) — — ( 3,002 )

1 unchanged sentence

Foreign currency translation adjustment, net of tax — — — — 21,375 — — 21,375

Balance as of June 30, 2025 163,856,290 $ 1,639 $ 1,237,891 $ ( 125,506 ) $ 4,949 ( 3,241,400 ) $ ( 48,394 ) $ 1,070,579

The accompanying notes are an integral part of the condensed consolidated financial statements.

CERTARA, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(IN THOUSANDS,

EXCEPT SHARE DATA) COMMON STOCK ADDITIONAL

CAPITAL ACCUMULATED

DEFICIT ACCUMULATED

COMPREHENSIVE

LOSS TREASURY STOCK TOTAL

STOCKHOLDERS'

SHARES AMOUNT SHARES AMOUNT

Balance as of March 31, 2024 160,687,886 $ 1,607 $ 1,191,237 $ ( 120,913 ) $ ( 7,036 ) ( 496,792 ) $ ( 10,537 ) $ 1,054,358

Equity-based compensation expense, net of forfeiture — — 9,783 — — — 9,783

Common stock withheld for tax liabilities — — — — — ( 386,091 ) ( 6,874 ) ( 6,874 )

Common shares issued for employee share-based compensation 1,081,434 11 ( 11 ) — — — — —

Restricted stock forfeiture ( 5,123 ) — — — — — — —

Change in fair value from interest rate swap, net of tax — — — — ( 591 ) — — ( 591 )

Net loss — — — ( 12,574 ) — — — ( 12,574 )

Foreign currency translation adjustment, net of tax — — — — ( 701 ) — — ( 701 )

Balance as of June 30, 2024 161,764,197 $ 1,618 $ 1,201,009 $ ( 133,487 ) $ ( 8,328 ) ( 882,883 ) $ ( 17,411 ) $ 1,043,401

Balance as of December 31, 2023 160,284,901 $ 1,603 $ 1,178,461 $ ( 116,230 ) $ ( 7,593 ) ( 436,615 ) $ ( 9,401 ) $ 1,046,840

2 unchanged sentences

Common shares issued for employee share-based compensation 1,269,727 13 ( 13 ) — — — — —

Restricted stock forfeiture ( 5,123 ) — — — — — — —

Common shares issued for contingent consideration 214,692 2 3,705 — — — — 3,707

2 unchanged sentences

Foreign currency translation adjustment, net of tax — — — — ( 708 ) — — ( 708 )

Balance as of March 31, 2024 160,687,886 $ 1,607 $ 1,191,237 $ ( 120,913 ) $ ( 7,036 ) ( 496,792 ) $ ( 10,537 ) $ 1,054,358

Balance as of June 30, 2024 161,764,197 $ 1,618 $ 1,201,009 $ ( 133,487 ) $ ( 8,328 ) ( 882,883 ) $ ( 17,411 ) $ 1,043,401

The accompanying notes are an integral part of the condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31,

SIX MONTHS ENDED JUNE 30,

(IN THOUSANDS) 2025 2024

2 unchanged sentences

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization of property and equipment 873 432

Amortization of intangible assets 17,741 15,996

Depreciation and amortization 37,432 33,025

Amortization of debt issuance costs 289 749

2 unchanged sentences

Change in fair value of contingent considerations ( 5,901 ) 5,661

Goodwill impairment

Deferred income taxes ( 1,969 ) ( 13,415 )

11 unchanged sentences

Cash flows from financing activities:

Proceeds from borrowings on term loan debt — 6,305

Payment of debt issuance costs — ( 1,216 )

Payments on long-term debt ( 1,500 ) ( 755 )

Common stock repurchase program ( 25,000 ) —

Payments for business acquisition related contingent consideration ( 13,230 ) ( 10,426 )

2 unchanged sentences

Effect of foreign exchange rate on cash and cash equivalents 5,314 ( 663 )

Net decrease in cash and cash equivalents, and restricted cash ( 97 ) ( 10,175 )

Cash and cash equivalents at beginning of period 179,183 234,951

Cash and cash equivalents at end of period $ 179,086 $ 224,776

Net decrease in cash and cash equivalents ( 16,917 ) ( 10,352 )

Cash and cash equivalents, and restricted cash, at beginning of period 179,183 234,951

Cash and cash equivalents, and restricted cash, at end of period $ 162,266 $ 224,599

Supplemental disclosures of cash flow information

25 unchanged sentences

(b) Unaudited Interim Financial Statements

The accompanying condensed consolidated balance sheet as of March 31, 2025, the condensed consolidated statements of operations and comprehensive income (loss) for the three months ended March 31, 2025 and

2024, the condensed consolidated statements of stockholders’ equity for the three months ended March 31, 2025 and 2024, the condensed consolidated statements of cash flows for the three months ended March 31, 2025 and 2024, and the related interim disclosures are unaudited.

The accompanying condensed consolidated balance sheet as of June 30, 2025, the condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2025 and

2024, the condensed consolidated statements of stockholders’ equity for the three and six months ended June 30, 2025 and 2024, the condensed consolidated statements of cash flows for the six months ended June 30, 2025 and 2024, and the related interim disclosures are unaudited.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S.

42 unchanged sentences

expected eligible revenue for the acquired businesses over the relevant measurement periods, the risk-profile of the expected eligible revenue for the acquired businesses, the uncertainty regarding the expected eligible revenue for the acquired businesses, the risk-free rate of return, the expected timing at which settlement of the contingent liabilities may occur, and the credit-adjusted discount rate associated with the risk of the Company’s future liability payments.

The following table sets forth the assets and liabilities that were measured at fair value on a recurring and non-recurring basis by their levels in the fair value hierarchy at March 31, 2025:

The following table sets forth the assets and liabilities that were measured at fair value on a recurring and non-recurring basis by their levels in the fair value hierarchy at June 30, 2025:

LEVEL 1 LEVEL 2 LEVEL 3 TOTAL

4 unchanged sentences

Contingent liabilities $ — $ — $ 19,211 $ 19,211

Interest rate swap liabilities — 2,587 — 2,587

Total liabilities $ — $ 2,587 $ 19,211 $ 21,798

7 unchanged sentences

Total liabilities $ — $ — $ 43,939 $ 43,939

For the three month period ended March 31, 2025, there were no transfers between the levels within the fair value hierarchy.

The Company’s Level 3 liabilities are acquisition related contingent consideration liabilities.

For the six month period ended June 30, 2025, there were no transfers between the levels within the fair value hierarchy.

The Company’s Level 3 assets are interest swap assets and level 3 liabilities are acquisition related contingent consideration liabilities and the interest rate swap liabilities.

The following table summarizes the Level 3 activity of the changes in the contingent consideration liability.

MARCH 31, 2025

JUNE 30, 2025

(In thousands)

2 unchanged sentences

Fair value remeasurement ( 5,828 )

Ending balance at March 31, 2025

Ending balance at June 30, 2025

For more information regarding fair value measurements and the fair value hierarchy, see Note 2.

2 unchanged sentences

Cash equivalents include highly liquid investments with maturities of three months or less from the date purchased.

The cash and cash equivalents was $ 179,086 and $ 179,183 at March 31, 2025 and December 31, 2024, respectively.

The cash and cash equivalents was $ 162,266 and $ 179,183 at June 30, 2025 and December 31, 2024, respectively.

(g) Accounts Receivable

6 unchanged sentences

The Company generally writes off a receivable or records a specific allowance for credit losses if it determines that the receivable is not collectible.

Allowances for credit losses of $ 2,244 and $ 2,164 were provided in the accompanying condensed consolidated financial statements as of March 31, 2025 and December 31, 2024, respectively.

Allowances for credit losses of $ 2,315 and $ 2,164 were provided in the accompanying condensed consolidated financial statements as of June 30, 2025 and December 31, 2024, respectively.

Accounts receivable consists of the following:

MARCH 31, 2025 DECEMBER 31,

JUNE 30, 2025 DECEMBER 31,

(In thousands)

5 unchanged sentences

The following table presents the information regarding the allowance for credit losses:

MARCH 31, 2025 DECEMBER 31,

JUNE 30, 2025 DECEMBER 31,

(In thousands)

20 unchanged sentences

During the quarter ended September 30, 2023, the Company and the counter party amended the floating rate of the swap agreement from term LIBOR to term SOFR due to LIBOR cessation.

At March 31, 2025 and December 31, 2024, the interest swap had a fair value of $ 1,420 and $ 2,213 , respectively.

The gross fair value recognized in accumulated other comprehensive income (loss) was $ 1,420 and $ 2,213 , at March 31, 2025 and December 31, 2024, respectively.

As the existing swap approaches maturity, the Company entered into two additional interest rate swap agreements in the second quarter of 2025, each with a notional amount of $ 115,000 , to continue hedging the interest rate risk associated with the term loan debt.

These new swaps also pay fixed interest rates and receive variable rates.

The fixed interest rates are 3.62 % and 3.64 %.

respectively.

Both contracts will become effective on August 31, 2025, and will mature on August 31, 2029.

The Company designate these swaps as cash flow hedges at hedge inception.

At June 30, 2025 and December 31, 2024, the interest swap had a fair value of $ 609 and $ 2,213 for existing swap, respectively.

The interest swap had a net fair value of $( 2,421 ) for new swaps at June 30, 2025.

The gross fair value recognized in accumulated other comprehensive income (loss) was $( 1,812 ) and $ 2,213 at June 30, 2025 and December 31, 2024, respectively.

The Company uses derivatives to manage certain interest exposures and designated all the derivatives as cash flow hedges.

2 unchanged sentences

Those amounts are reclassified into interest expenses in the same period during which the hedged transactions impact earnings.

The amount of derivative gains reclassified from accumulated other comprehensive income on derivative instruments recognized in the Company’s condensed consolidated statements of operations and comprehensive income (loss) was $ 942 and $ 1,525 for the three months ended March 31, 2025 and 2024, respectively.

The notional amounts, fair values, and classification of derivative instruments in the condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024 were as follows:

The amount of derivative gains reclassified from accumulated other comprehensive income on derivative instruments recognized in the Company’s condensed consolidated statements of operations and comprehensive income (loss) was $ 941 , $ 1,526 , $ 1,883 , and $ 3,051 for the three and six months ended June 30, 2025 and 2024, respectively.

The notional amounts, fair values, and classification of derivative instruments in the condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024 were as follows:

Interest rate swap derivative designated as cash flow hedging instrument:

MARCH 31, 2025 DECEMBER 31,

JUNE 30, 2025 DECEMBER 31,

(In thousands)

1 unchanged sentence

Prepaid expenses and other current assets $ 775 $ 2,213

Other long-term liabilities $ 2,587 $ —

The net amount of deferred gains related to derivative instruments designated as cash flow hedges that is expected to be reclassified from accumulated other comprehensive gains into earnings over the next twelve month s is $ 775 .

9 unchanged sentences

The following describes the nature of the Company’s primary types of revenues and the revenue recognition policies as they pertain to the types of transactions the Company enters into with its customers.

Consulting Service Revenues

The Company’s primary professional services offering includes consulting services, which may be either strategic consulting services, reporting and analysis services, regulatory writing services, or any combination of the three.

The Company’s professional services contracts are either time-and-materials or fixed fee.

Service revenues are generally recognized over time as the services are performed.

Generally, these services are delivered to customers electronically.

Revenue from time-and-material contracts is recognized on an output basis as labor hours are delivered and/or direct expenses are incurred.

Revenues for fixed-price services are generally recognized over time by applying input methods to estimate progress to completion.

Accordingly, the number of resources being paid for and the varying lengths of time they are being paid for determine the measure of progress.

Software Licenses

14 unchanged sentences

Any unrecognized portion of amounts paid in advance for licenses and services is recorded as deferred revenue.

Consulting Service Revenues

The Company’s professional services contracts are either time-and-materials or fixed fee.

Service revenues are generally recognized over time as the services are performed.

Generally, these services are delivered to customers electronically.

Revenue from time-and-material contracts is recognized on an output basis as labor hours are delivered and/or direct expenses are incurred.

Revenues for fixed-price services are generally recognized over time by applying input methods to estimate progress to completion.

Accordingly, the number of resources being paid for and the varying lengths of time they are being paid for determine the measure of progress.

Arrangements with Multiple Performance Obligations

12 unchanged sentences

The portion of deferred revenue that will be recognized within 12 months is recorded as current deferred revenue, and the remaining portion is recorded as deferred revenue in the condensed consolidated balance sheets.

Contract balances at March 31, 2025 and December 31, 2024 were as follows:

MARCH 31, 2025 DECEMBER 31,

Contract balances at June 30, 2025, December 31, 2024, and December 31, 2023 were as follows:

JUNE 30, 2025 DECEMBER 31,

2024 DECEMBER 31,

2 unchanged sentences

Contract liabilities $ 71,215 $ 78,878 $ 61,748

During the three months ended March 31, 2025, the Company recognized revenue of $ 37,040 related to contract liabilities at December 31, 2024.

The unsatisfied performance obligations as of March 31, 2025 were $ 139,205 .

During the six months ended June 30, 2025, the Company recognized revenue of $ 56,247 related to contract liabilities at December 31, 2024.

The unsatisfied performance obligations as of June 30, 2025 were $ 150,835 .

We expect to recognize approximately $ 120,638 or 80.0 % of this revenue over the next 12 months and the remainder thereafter.

6 unchanged sentences

Amortization of capitalized costs is included in sales and marketing expenses in our condensed consolidated statements of operations and comprehensive income (loss).

Capitalized contract acquisition costs were $ 1,027 and $ 873 as of March 31, 2025 and December 31, 2024, respectively, and were included in prepaid expenses and other current assets in the condensed consolidated balance sheets.

Capitalized contract acquisition costs were $ 1,053 and $ 873 as of June 30, 2025 and December 31, 2024, respectively, and were included in prepaid expenses and other current assets in the condensed consolidated balance sheets.

Sources and Timing of Revenue

1 unchanged sentence

The following table presents the Company’s revenue by timing of revenue recognition to understand the risks of timing of transfer of control and cash flows:

THREE MONTHS ENDED MARCH 31,

THREE MONTHS ENDED

JUNE 30, SIX MONTHS ENDED

2025 2024 2025 2024

(In thousands)

10 unchanged sentences

The Company invests available cash in bank deposits, investment-grade securities, and short-term interest-producing investments, including government obligations and other money market instruments.

At March 31, 2025 and December 31, 2024, the investments were bank deposits, overnight sweep accounts, and money market funds.

The Company has

adopted credit policies and standards to evaluate the risk associated with sales that require collateral, such as letters of credit or bank guarantees, whenever deemed necessary.

At June 30, 2025 and December 31, 2024, the investments were bank deposits, overnight sweep accounts, and money market funds.

The Company has adopted credit policies and standards to evaluate the risk associated with sales that require collateral, such as letters of credit or bank guarantees, whenever deemed necessary.

Management believes that any risk of loss is significantly reduced due to the nature of the customers and distributors with which the Company does business.

As of March 31, 2025 and December 31, 2024, no single customer accounted for more than 10% of the Company’s accounts receivable.

No single customer accounted for more than 10% of the Company’s revenues during the three months ended March 31, 2025 and 2024.

As of June 30, 2025 and December 31, 2024, no single customer accounted for more than 10% of the Company’s accounts receivable.

No single customer accounted for more than 10% of the Company’s revenues during the six months ended June 30, 2025 and 2024.

Business Combinations

1 unchanged sentence

The results of operations for the acquisitions have been included in the Company’s results of operations prospectively from the date of acquisition.

Since 2013, and as of March 31, 2025, the Company has completed 21 acquisitions, of which 14 have included software or technology.

Since 2013, and as of June 30, 2025, the Company has completed 21 acquisitions, of which 14 have included software or technology.

Details of acquisitions that have closed since the beginning of fiscal year 2024 are provided below.

Chemaxon, Kft.("Chemaxon")

Chemaxon, Kft.

On October 1, 2024, the Company acquired 100 % of the equity of Chemaxon, a leading cheminformatics company that provides platforms, applications, and solutions to handle chemical entities in life sciences, biotechnology, agrochemicals, new materials, education, and other research industries, for total estimated consideration of $ 96,401 .

2 unchanged sentences

The business combination was not material to the Company’s consolidated financial statements.

During the first quarter of 2025, the Company recorded a $ 2,947 adjustment to goodwill and deferred tax balances related to the Chemaxon acquisition, reflecting updates to the purchase price allocation.

During the first half of 2025, the Company recorded a $ 2,947 adjustment to goodwill and deferred tax balances related to the Chemaxon acquisition, reflecting updates to the purchase price allocation.

Based on the Company’s purchase price allocation, approximately $ 36,000 , $ 11,000 , $ 2,900 , $ 330 and $ 49,430 of the purchase price were assigned to developed technology, customer relationship, trademark, non-compete agreements, and goodwill, respectively.

6 unchanged sentences

Prepaid Expenses and Other Current Assets and Other Long-Term Assets

Prepaid expense and other current assets at March 31, 2025 and December 31, 2024 consisted of the following:

MARCH 31, 2025 DECEMBER 31,

Prepaid expense and other current assets at June 30, 2025 and December 31, 2024 consisted of the following:

JUNE 30, 2025 DECEMBER 31,

(In thousands)

5 unchanged sentences

Prepaid expenses and other current assets $ 21,619 $ 29,480

Other long-term assets at March 31, 2025 and December 31, 2024 consisted of the following:

MARCH 31, 2025 DECEMBER 31,

Other long-term assets at June 30, 2025 and December 31, 2024 consisted of the following:

JUNE 30, 2025 DECEMBER 31,

(In thousands)

13 unchanged sentences

The Company either deferred and amortize debt issuance costs or recognized expenses or losses, according to the applicable accounting guidance for each category.

Borrowings under the Credit Agreement bear interest at a rate per annum equal to, at the election of the Borrowers, either (i) the Term SOFR rate, with a floor of 0.00 % plus an applicable margin rate of 3.00 % for the Term Loans and between 3.50 % and 2.75 % for loans under the Revolving Facility, depending on the applicable first lien leverage ratio, or (ii) an Alternate Base Rate (“ABR”), with a floor of 1.00 %, plus an applicable margin rate of 2.00 % for the Term Loans or between 2.50 % and 1.75 % for loans under the Revolving Facility, depending on the applicable first lien leverage ratio.

Borrowings under the Credit Agreement bear interest at a rate per annum equal to, at the election of the Borrowers, either (i) the Term SOFR rate, with a floor of 0.00 % plus an applicable margin rate of 3.00 % for the Term Loans and between 2.75 % and 3.50 % for loans under the Revolving Facility, depending on the applicable first lien leverage ratio, or (ii) an Alternate Base Rate (“ABR”), with a floor of 1.00 %, plus an applicable

margin rate of 2.00 % for the Term Loans or between 1.75 % and 2.50 % for loans under the Revolving Facility, depending on the applicable first lien leverage ratio.

The ABR is determined as the greatest of (a) the prime rate, (b) the federal funds effective rate, plus 0.50 %, and (c) the Term SOFR rate plus 1.00 %.

Additionally, the Company is obligated to pay a commitment fee of the unused amount and other customary fees.

As of each of March 31, 2025 and December 31, 2024, available borrowings under the revolving lines of credit were $ 100,000 .

The effective interest rate was 7.33 % and 9.24 % for the three months ended March 31, 2025 and 2024, respectively, for the term loan debt.

As of each of June 30, 2025 and December 31, 2024, available borrowings under the revolving lines of credit were $ 100,000 .

The effective interest rate was 7.4 % and 9.2 % for the six months ended June 30, 2025 and 2024, respectively, for the term loan debt.

As discussed previously, the Company entered into interest rate swap agreements and continues to use the swap to mitigate the interest risk for the Company's debt obligations under the Credit Agreement.

Interest incurred on the Credit Agreement with respect to the term loan amounted to $ 5,470 and $ 6,798 for the three months ended March 31, 2025 and 2024, respectively.

Accrued interest payable on the Credit Agreement with respect to the term loan amounted to $ 60 and $ 61 at March 31, 2025 and December 31, 2024, respectively, and is included in accrued expenses.

Commitment fees incurred for the undrawn balance of the revolving line of credit was $ 94 and $ 63 for the three months ended March 31, 2025 and 2024, respectively.

There was $ 1 accrued interest payable on the revolving line of credit as of March 31, 2025 and December 31, 2024.

Interest incurred on the Credit Agreement with respect to the term loan amounted to $ 5,494 , $ 6,736 , $ 10,964 and $ 13,534 for the three and six months ended June 30, 2025 and 2024, respectively.

Accrued interest payable on the Credit Agreement with respect to the term loan amounted to $ 60 and $ 61 at June 30, 2025 and December 31, 2024, respectively, and is included in accrued expenses.

Commitment fees incurred for the undrawn balance of the revolving line of credit was $ 73 , $ 63 , $ 167 and $ 126 for the three and six months ended June 30, 2025 and 2024, respectively.

There was $ 1 accrued interest payable on the revolving line of credit as of June 30, 2025 and December 31, 2024.

Long-term debt consists of the following:

MARCH 31, 2025 DECEMBER 31,

JUNE 30, 2025 DECEMBER 31,

(In thousands)

5 unchanged sentences

Long-term debt, net of current portion and debt issuance costs $ 291,170 $ 292,425

The principal amount of long-term debt outstanding as of March 31, 2025 matures in the following years:

The principal amount of long-term debt outstanding as of June 30, 2025 matures in the following years:

Remainder of 2025 2026 2027 2028 2029 Thereafter TOTAL

8 unchanged sentences

With respect to operating lease liabilities, current operating lease liabilities are included in current liabilities and non-current operating lease liabilities are included in long-term liabilities in the condensed consolidated balance sheets.

At March 31, 2025, the weighted average remaining lease terms were 5.75 years for operating leases, and the weighted average discount rate was 5.57 % for operating leases.

At June 30, 2025, the weighted average remaining lease terms were 5.8 years for operating leases, and the weighted average discount rate was 5.6 % for operating leases.

For additional information on the Company's leases, see Note 13.

“Leases” to the consolidated financial statements included in the Company’s 2024 Annual Report.

The following table summarizes the lease-related assets and liabilities recorded in the condensed consolidated balance sheets at March 31, 2025 and December 31, 2024:

Lease Position Balance Sheet Classification MARCH 31, 2025 DECEMBER 31, 2024

The following table summarizes the lease-related assets and liabilities recorded in the condensed consolidated balance sheets at June 30, 2025 and December 31, 2024:

Lease Position Balance Sheet Classification JUNE 30, 2025 DECEMBER 31, 2024

(In thousands)

4 unchanged sentences

Total lease liabilities $ 13,688 $ 16,472

The following table summarizes by year the maturities of our minimum lease payments as of March 31, 2025:

The following table summarizes by year the maturities of our minimum lease payments as of June 30, 2025:

(In thousands)

6 unchanged sentences

Accrued expenses consist of the following:

MARCH 31, 2025 DECEMBER 31,

JUNE 30, 2025 DECEMBER 31,

(In thousands)

7 unchanged sentences

Other long-term liabilities consist of the following:

MARCH 31, 2025 DECEMBER 31,

JUNE 30, 2025 DECEMBER 31,

(In thousands)

Uncertain tax position liability $ 1,770 $ 1,718

Contingent consideration 24,860 23,581

Derivative Liabilities - Long-term 2,587 —

Contingent consideration - long term — 23,581

Total other long-term liabilities $ 4,357 $ 25,299

10 unchanged sentences

Forfeited — —

Non-vested restricted stock as of March 31, 2025 133,724 $ 22.93

___________________________________

Equity-based compensation expenses related to the restricted stock exchanged for performance-based Class B Units were $ 66 and $ 250 for the three months ended March 31, 2025 and 2024, respectively.

At March 31, 2025, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the accelerated attribution approach was $ 94 , which is expected to be recognized over a weighted-average period of 5.5 months.

Equity-based compensation expenses related to the restricted stock exchanged for time-based Class B Units were $ 124 and $ 377 for the three months ended March 31, 2025 and 2024, respectively.

At March 31, 2025, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the straight-line attribution approach was $ 197 , which is expected to be recognized over a weighted-average period of 5.3 months.

Non-vested restricted stock as of June 30, 2025 124,219 $ 22.92

Equity-based compensation expenses related to the restricted stock exchanged for performance-based Class B Units were $ 55 , $ 156 , $ 121 , and $ 406 for the three and six months ended June 30, 2025 and 2024, respectively.

At June 30, 2025, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the accelerated attribution approach was $ 39 , which is expected to be recognized over a weighted-average period of 2.6 months.

Equity-based compensation expenses related to the restricted stock exchanged for time-based Class B Units were $ 118 , $ 221 , $ 242 and $ 598 for the three and six months ended June 30, 2025 and 2024, respectively.

At June 30, 2025, the total unrecognized equity-based compensation expense related to outstanding restricted stock recognized using the straight-line attribution approach was $ 80 , which is expected to be recognized over a weighted-average period of 2.4 months.

2020 Incentive Plan

10 unchanged sentences

Non-vested RSUs as of December 31, 2024 3,204,589 $ 19.61

Granted 616,403 11.60

Vested* ( 1,344,638 ) 20.59

Forfeited ( 190,036 ) 19.05

Non-vested RSUs as of March 31, 2025 3,106,668 $ 19.65

Non-vested RSUs as of June 30, 2025 2,286,318 $ 16.92

___________________________________

* The number of the RSUs vested included 479,577 shares that were withheld on behalf of employees to satisfy the statutory tax withholding requirements.

Equity-based compensation expenses related to the RSUs were $ 6,733 and $ 7,705 for three months ended March 31, 2025 and 2024, respectively.

At March 31, 2025, the total unrecognized equity-based compensation expense related to outstanding RSUs was $ 32,634 , which is expected to be recognized over a weighted-average period of 20.8 months.

Equity-based compensation expenses related to the RSUs were $ 5,507 , $ 8,614 , $ 12,240 and $ 16,319 for three and six months ended June 30, 2025 and 2024, respectively.

At June 30, 2025, the total unrecognized equity-based compensation expense related to outstanding RSUs was $ 32,375 , which is expected to be recognized over a weighted-average period of 20.7 months.

Performance Stock Units

3 unchanged sentences

The Company will continue to assess the probability of each condition being achieved at each reporting period to determine whether and when to recognize compensation costs.

A summary of the Company’s PSU activity for the period ended March 31, 2025 is as follows:

A summary of the Company’s PSU activity for the period ended June 30, 2025 is as follows:

UNITS WEIGHTED-

Non-vested PSUs as of December 31, 2024 645,377 $ 20.95

Granted 1,062,987 10.27

Forfeited ( 3,322 ) 23.24

Cancelled* ( 201,138 ) 22.13

Non-vested PSUs as of March 31, 2025 444,239 $ 20.42

Non-vested PSUs as of June 30, 2025 1,503,904 $ 13.24

__________________________________

* During the first quarter of 2025, the Company cancelled 201,138 PSU shares that did not meet the required performance conditions for vesting.

Equity-based compensation expenses related to the PSUs were $ 148 and $ 636 for the three months ended March 31, 2025 and 2024, respectively.

At March 31, 2025, the total unrecognized equity-based compensation expense related to outstanding PSUs was $ 611 , which is expected to be recognized over a weighted-average period of 14.5 months.

* During the first half of 2025, the Company cancelled 201,138 PSU shares that did not meet the required performance conditions for vesting.

Equity-based compensation expenses related to the PSUs were $ 2,565 , $ 686 , $ 2,713 and $ 1,321 for the three and six months ended June 30, 2025 and 2024, respectively.

At June 30, 2025, the total unrecognized equity-based compensation expense related to outstanding PSUs was $ 8,704 , which is expected to be recognized over a weighted-average period of 19.4 months.

The following table summarizes the components of total equity-based compensation expense included in the condensed consolidated statements of operations and comprehensive income (loss) for each period presented:

THREE MONTHS ENDED MARCH 31,

THREE MONTHS ENDED

JUNE 30, SIX MONTHS ENDED

2025 2024 2025 2024

(In thousands)

8 unchanged sentences

Furthermore, the Company agreed to pay additional contingent consideration related to a business acquisition, contingent on the resolution of certain tax-related contingencies.

For the three months ended March 31, 2025, the Company paid contingent consideration of $ 18,900 , consisting of $ 13,230 in cash and $ 5,670 in Company stock.

The total contingent liabilities were $ 25,405 and $ 44,468 at March 31, 2025 and December 31, 2024, respectively.

For the six months ended June 30, 2025, the Company paid contingent consideration of $ 18,900 , consisting of $ 13,230 in cash and $ 5,670 in Company stock.

The total contingent liabilities were $ 19,675 and $ 44,468 at June 30, 2025 and December 31, 2024, respectively.

The contingent liabilities are included in accrued expenses and other long-term liabilities in the Company's condensed consolidated balance sheet.

Legal proceedings

The Company does not have any pending or threatened litigation which, individually or in the aggregate, would have a material adverse effect on its condensed consolidated financial statements as of March 31, 2025.

Assurance-type warranty

18 unchanged sentences

“Summary of Significant Accounting Policies", for a description of the Company’s revenue categories.

The following table summarizes revenue by geographic area for the three months ended March 31, 2025 and 2024:

THREE MONTHS ENDED MARCH 31,

The following table summarizes revenue by geographic area for the three and six months ended June 30, 2025 and 2024:

THREE MONTHS ENDED

JUNE 30, SIX MONTHS ENDED

2025 2024 2025 2024

(In thousands)

7 unchanged sentences

THREE MONTHS ENDED

JUNE 30, SIX MONTHS ENDED

2025 2024 2025 2024

(In thousands)

6 unchanged sentences

Change in fair value of contingent consideration ( 5,722 ) 2,783 ( 5,901 ) 5,661

Intangible asset amortization 17,741 15,996

Depreciation expense 873 432

Depreciation and amortization 18,818 16,597 37,432 33,025

Other segment expense* ( 1,557 ) 1,660 ( 2,811 ) 3,273

Interest expense 4,802 5,578 9,608 11,329

Income tax benefit ( 201 ) ( 751 )

Income tax expense 8,219 305 8,018 ( 446 )

Segment net income $ ( 1,968 ) $ ( 12,574 ) $ 2,775 $ ( 17,257 )

7 unchanged sentences

The currently forecasted ETR may vary from the actual year-end due to the changes in these factors.

The Company's global ETR for the three months ended March 31, 2025 and 2024 were ( 4 )% and 14 %, respectively, including discrete tax items.

The current year decrease in the ETR was principally due to the combined effect of the overall decrease in pre-tax book loss, the impact of non-deductible items, and the tax effect of certain discrete items.

The Company's global ETR for the three and six months ended June 30, 2025 and 2024 were 131 %, ( 2 )%, 74 %, and 3 %, respectively, including discrete tax items.

The current year increase in the ETR was principally due to the combined effect of the overall increase in pre-tax book income, the impact of non-deductible items, and the tax effect of certain discrete items.

On July 4, 2025, the United States enacted the One Big Beautiful Bill Act (the “OBBBA”), which includes changes to U.S.

tax law such as significant amendments to the U.S.

federal income tax code.

Key provisions include the permanent reinstatement of immediate expensing for domestic research expenditures, the restoration of full expensing for qualified machinery, equipment and other short-lived assets, and several modifications to existing international tax provisions.

These provisions were enacted subsequent to the end of second quarter of 2025 and therefore are not reflected in the accompanying condensed consolidated financial statements.

The Company is in the process of evaluating the impact of the OBBBA.

Earnings per Share

1 unchanged sentence

Diluted earnings per share is computed by dividing the net income (loss) attributable to stockholders by the weighted-average number of shares and dilutive potential common shares during the period.

THREE MONTHS ENDED MARCH 31,

THREE MONTHS ENDED

JUNE 30, SIX MONTHS ENDED

2025 2024 2025 2024

(In thousands, except per share and share data)

Net income (loss) available to common shareholders $ ( 1,968 ) $ ( 12,574 ) $ 2,775 $ ( 17,257 )

Basic weighted-average common shares outstanding 160,996,258 159,524,270

Basic weighted-average common shares outstanding(a) 160,916,057 160,505,223 160,955,936 160,014,746

Basic earnings per common share $ ( 0.01 ) $ ( 0.08 ) $ 0.02 $ ( 0.11 )

2 unchanged sentences

Basic weighted-average common shares outstanding 160,916,057 160,505,223 160,955,936 160,014,746

Dilutive potential common shares* 354,034 —

Dilutive potential common shares(b) — — 645,088 —

Diluted weighted-average common shares outstanding 160,916,057 160,505,223 161,601,024 160,014,746

1 unchanged sentence

__________________________________

• For the period ended March 31, 2024, the Company excluded potentially dilutive securities from the calculation of diluted earnings per share that could potentially dilute earnings per share in the future because of the anti-dilutive effect of the reported net loss.

Subsequent Event

On April 14, 2025, the Company issued a press release announcing that its Board of Directors had approved a $ 100,000 thousand share repurchase program for its outstanding common shares.

On the same day, the Company also announced that Arsenal Capital Partners, its largest shareholder, had agreed to a one-year lock-up on the sale of shares acquired by Arsenal and affiliates from EQT, the Company's former parent, in a December 2022 transaction.

Repurchases of shares of the Company’s common stock may be conducted through open market purchases or privately negotiated transactions in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including through trading plans pursuant to Rule 10b5-1 under the Exchange Act.

The actual timing and amount of future repurchases are subject to business and market conditions, corporate and regulatory requirements, stock price, acquisition opportunities and other factors.

The stock repurchase program does not obligate the Company to acquire any particular amount of common stock, and the program may be suspended or terminated at any time by the Company at its discretion without prior notice.

(a) The three- and six- months ended June 30, 2025, the Company repurchased 1,793,279 shares of its common stock under the stock repurchase program authorized by the Company's Board of Directors on April 11, 2025.

The program authorizes the Company to repurchase up to $ 100,000 of its common stock.

(b) The three-months period ended June 30, 2025 and three- and six-months period ended June 30, 2024, the Company excluded potentially dilutive securities from the calculation of diluted earnings per share that could potentially dilute earnings per share in the future because of the anti-dilutive effect of the reported net loss.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements